Nokia is suing Apple for allegedly infringing ten of the company's patents in its iPhone device.
The world's number one mobile phone vendor filed its lawsuit in Delaware's federal district court today.
Nokia detailed ten patents in the case that relate to technologies "fundamental to making devices which are compatible with one …

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Just curious...

...but surely the cost of patent royalties would be included in the cost of the relevant components?

Apple don't make their own GSM chips, CPUs or antennas. The component breakdowns published on the likes of ifixit show a bunch of mostly off-the-shelf components for the phone elements. (The multi-touch display is presumably their own IP.)

Why are Apple being asked to pay *again* for something that should have already been paid for?

Hypocrites.

Curious. I recall Nokia singing a wholly different tune when Qualcomm were getting all heavy with the lawsuits.

Odd how times change.

That said, Apple should just pay the damn license, unless they think they have Nokia over a barrel on some other technology, in which case both parties should just quit the public posturing and get back to the table.

@Sean Timarco Baggaley "Just curious..."

Cross licensing

Nokia has many patents, but even they cannot produce a phone based solely on their patents. In many cases, they bring their patents to the table and so do other companies, then they freely let their patents be freely used.

In the case of Apple, they clearly don't want to pay. So, while there are plenty of people here talking about why isn't Nokia selling others, that is because they already have agreement, see above. Once Nokia is done with Apple, expect to see others taking Apple to court. The legal woes of Apple have just begun.

Nokia had their time and failed

Nokia lost its crown in a couple of Western European countries because of the iPhone.

We have to thank Apple for bringing something closer to customers' expectations.

Nokia made billions over the past few years. They did everything to maintain such cash cow and they deliberately delayed the launch of mobile handsets with similar computer tools and gateways with internet.

So they can sue Apple for the iPhone, but they should be blamed for not being to bring something similar before!

Licensing for components

Without wishing to comment on this particular case, it appears that lots of people want to comment on this story without having the first clue how IP works in the cellphone industry.

Generally when you buy a component from someone which implements a standard, and parts of that standard require patent royalties, you have to take a license for that IP in order to sell a device with those components. The component manufacturer does not usually have a transferable license that they can sub-license to their clients.

There are some exceptions but since most of the cellphone makers have their own IP rolled into the standards too, they're quite happy with this situation since they can cross-license. Cellphone makers who don't participate in building the essential infrastructure have to pay.

This is why Nokia had to pay Qualcomm billions of $ lately after extensive (expensive) argument, it was decided in the court that Nokia's own CDMA chips infringed Qualcomm's patents. The end result is that current Nokia CDMA phones have a new radio architecture and Nokia have a license from Qualcomm to sell them. It's all business and the companies involved rarely take these issues personally once resolved.

In this case, these are alleged to be patents on the essential parts of GSM etc. and they will probably be available on standard RAND terms.

Complex legal situations like this are one of the reasons why the cellphone market is difficult for new entrants, among many other things like the huge complexity of devices nowadays.

A lot of people doesn't seem to understand...

They're coming out now with this because the iPhone is doing well. Like any patent holders, they do not start suing people until it has proved to be a success. This maximises their chance to get as much juice as possible.

Developing any product always has this risk. Yes the whole patent system is starting to get annoying particularly because when it was invented, globalisation is not to the stage it is today.

With more people, more companies = more patents, which also makes anyone developing new products a nightmare if you have to go through each patent to make sure you're not infringing first - yes I think the patent system should be scrapped. As always, if you want to keep something secret it is best to keep it to yourself.

In the end, yes, the small fries have no chance of survival, but think of it this way, the pyramid is only getting higher.

I like Apple, I use their products, but at the same time, this lawsuit may actually slap some reality back into the world, companies who diversify is starting as a newbie in the field cannot become the boss over night, if you get what I'm saying.

Nokia - too busy for that phone thingy stuff

"For the various Church of Jobbitologists here, please note that Nokia have been in the mobile market since time immemorial, and have been actively involved in developing the various standards of mobile technology, from GSM, GPRS, 3G onwards..."

So they didn't quite have enough time free from all this to manage to design a decent phone?

Re: Licensing for components

"Generally when you buy a component from someone which implements a standard, and parts of that standard require patent royalties, you have to take a license for that IP in order to sell a device with those components. The component manufacturer does not usually have a transferable license that they can sub-license to their clients."

So if company A manufactures chips which company B buys and uses as components in a handset which company C buys and installs their software on to sell to the end user then all three companies have to pay Nokia for licensing? Seems a bit crazy to me, like VAT being applied along each stage of a sales chain.

These patents shouldn't be allowed to last more than five years. I can understand the inventing company needing compensation for their R&D efforts but being able to charge for something that becomes a worldwide standard for decade after decade is plain ridiculous.

Money, money, money ...

I would just like to assure you that THIS HAS NOTHING TO DO WITH Nokia making a loss and Apple making huge profits. Nokia have just decided to sue for patent infringement because ... well, they forgot to sue before.

Re: AC @ 19:08

You want standards without patents? Why don't you fund the development of them then? The standards used in the mobile phone world have all cost companies like Nokia a significant amount of time and money to develop - you're suggesting that they should then give the results of all this hard work away to their competitors for free? And you don't see why they might not want to do this?

Allowing IP in standards to remain patented (and reasonably licensed) encourages interoperability between manufacturers, which last time I checked was a Good Thing(TM). The alternatives are that we have lots of different proprietary standards and the consumer loses or you have an independent body create the standards which since it won't be getting any return on any investment will be default be done on a shoe-string which will result in poorer quality of work and certainly less innovation. Once again the consumer loses.

What El Reg fails to mention...

..., and what is mentioned on other sites and in the linked press release, is that virtually all other mobile manufacturers already licence these patents. Nokia isn't trolling or targeting Apple because they're successful - it's suing because Apple are refusing to licence the patents which everyone else seems to agree are valid.

patents

this essentially comes down to Nokai having spent the last two years negotiating with apple over licensing fees.

for some time now analysts who cover apple and nokia for investment companies have know about this and it will have no impact on share prices.

Apple does not agree to the the amount Nokia is asking for and has stepped away from the table, hoping to put it before a judge who will decide according to apple a reasonable amount for the license of said patents.

Well, yes there is...

Putonghua73 : "Is there a legal basis for classifying standards as intellectual propety? Any design / product based upon such standards, yes - but the actual standards themselves?"

BetaMax, VHS, CD's, DVD's BluRay.

They're all 'standards' used by many different companies but certain others hold the development rights to them. For many many years people and companies had to pay (Panasonic?) a royalty if you wanted to produce a CD or CD player. Don't know what the situation with that tech is now but i'm sure the legality of it remains.

@Magnetik

"So if company A manufactures chips which company B buys and uses as components in a handset which company C buys and installs their software on to sell to the end user then all three companies have to pay Nokia for licensing? Seems a bit crazy to me, like VAT being applied along each stage of a sales chain."

It is more common that Company B (HTC, for example) will make their own software, or buy the software from Company C (Microsoft, for example) and sell the devices themselves, meaning that often only Company B will need licenses.

However your scenario is where the magic of licensing and IP law can take us. That probably would not be the case where standards bodies are involved since there is usually a requirement for RAND license terms, and you might decide that such an arrangement was not reasonable.

A similar situation can be seen in the PC world when looking at Intel chipset licenses and them being non-transferable when you purchase a company which holds one (sometimes). Logic need not necessarily apply here, if the contract disallows it.

There are also often basket license arrangements made especially when standards bodies are involved, for example MPEG-LA.

There are many thousands of these licenses involved in producing almost any electronic product today, and there seems to be no idea at all in the wider world just how complex it all gets. It is even more complicated by the fact that there may be no IP protection in the countries where the components are made and assembled, yet there is such protection in the markets where the end device is sold.

In the end, only the lawyers really win, but this is the law right now.

@ Rob 9

True.

Sony/Phillips own the rights to CD's/optical media and receive, purportedly, 0.5 cents for every disk sold. Thats *every* disk, whether it's a blank or got something on it. The numbers go up *very* quickly.

The DVD Forum was set up because of all the standards patents that Sony/Phillips own, in a bid to stop another Beta/VHS format war, the DVD Forum was set up - the disk and reading mechanism covered by Sony/Phillips patents and the compression algorithm/security owned by (i think) Toshiba - it's the compression system that gives us the odd disk sizes (4.5 and 9 GB), it should have been 5 and 10.

Nokia

These comments about Apple taking over from Nokia are nothing short of a major giggle. Last year Apple made $1b profit, last year Nokia spent around $30b on R&D alone, Nokia is able to spend more money than Apple has on R&D, but the fact is they are spending insane amounts of money on researching new tech, then along comes apple who thinks "hey, we don't have to spend $30 billion every year on R&D, we'll just steal the patents from Nokia!"

The iPhone is 3 years old now? (I have an iPhone btw, can't see the point of it, it sucks) so in that time Nokia would have spend $120b on research, Apple have a small share of the market in one segment, the Smart Phone (not that the iPhone is smart) which is rather insignifigant to Nokia who are switching from Symbian so expect the next generations of Nokia phones to do what everyone wishes their iPhone does. Now to go stick my iPhone on ebay.

@EvilGav 1

And likewise with Blu-Ray, the patents belong to the BDA members (mostly Sony) and licence fees are paid to them.

The DVD Forum were actually behind HD DVD, again to avoid the format war, and wanted to see the same outcome as DVD where everyone would get together and produce a combined format. Which would have seen again Sony and Tosh mixing it for a common format with their own patents in the mix. Despite all efforts Sony refused and we have Blu-Ray with large licence fees and patent ownership that are skewed heavily in favour of Sony. It's still a "standard" thanks to the BDA saying it is, but doesn't mean it's a free for all. Which is why China said "stuff that" and made CBHD instead (essentiall HD DVD slightly modified and rebranded with low licence costs).

Complacent and Bitter

Nokia just lost the plot same as Motorola - they stopped caring. When their customers (including us business folks ) complained about lack of compatibility, poor migration & zero support we got that attitude you get in restaurants "that's the way we do it, we;re the market leader & no body else is complaining" Well my Communicator is sitting in a draw still it's box - never worked with my Mac, or Entourage and that's what I care about.

Now Apple are delivering a better communications platform, and are kicking their backsides as the 'must have gizmo' they're feebly thrashing around in the bath trying to get the plug back in. As for their appstore OVI 'pants'.

I'm not an Apple zealot, I'm a PC engineer, I just like things to work together seamlessly.

Re: Standards without patents, please! (Re: AC @ 19:08)

(Sheesh, everyone! Learn how to keep the topic, not change it to this @... stuff all the time!)

tiggertaebo writes...

"You want standards without patents? Why don't you fund the development of them then? The standards used in the mobile phone world have all cost companies like Nokia a significant amount of time and money to develop - you're suggesting that they should then give the results of all this hard work away to their competitors for free? And you don't see why they might not want to do this?"

Nope. I'm suggesting that if people want to profit from their technologies being *mandated* as public standards - that is, everyone playing the game has to implement those technologies - then it shouldn't be like giving a bunch of companies tax-raising powers. That it takes an outsider to shake up the mobile business just shows how moribund it gets when a cartel gets to choose who can compete in the market.

Besides, it isn't usually just corporations doing the work. A bunch of stuff comes out of public organisations, too, although it's more often than not siphoned off to "spin-offs" these days - your tax money at work, there, that is. So, I am almost certainly funding standards development, in fact - I get the bill for this every year.

"Allowing IP in standards to remain patented (and reasonably licensed) encourages interoperability between manufacturers, which last time I checked was a Good Thing(TM)."

Interoperability is a good thing, but it is in no way predicated by any technology being patented. In fact, where there is a choice of standards, it's highly likely that those unencumbered by patents will be favoured - you don't have to be an award-winning economist to understand why this might be. Web standards are a reasonable example of interoperability through unencumbered standards. Although you could complain about Web standards not being followed properly by, say, Microsoft, that isn't really anything to do with people not having to pay each other patent royalties.

"The alternatives are that we have lots of different proprietary standards and the consumer loses or you have an independent body create the standards which since it won't be getting any return on any investment will be default be done on a shoe-string which will result in poorer quality of work and certainly less innovation. Once again the consumer loses."

The Web is a pretty decent counterexample: a bunch of people created something of value for a greater number of people instead of thinking about how they could nickel-and-dime everyone all the time. Just consider the failure that the Gopher technology was, and how an obsession with "monetizing intellectual property" can lead to nowhere. Had some government mandated Gopher for public information services you'd more or less have the cartel atmosphere that pervades mobile communications today.

Having patents on standards is like slipping some kind of earmark on legislation: it suggests corruption and nepotism of the form "we like these people, so here's a guaranteed revenue stream for them". Public standards, which is what GSM and UMTS have effectively become, should be all about interoperability and creating value for the public good - that's what we expect from our governments and legislators - not about appointing private gatekeepers for a given market, suppressing competition and propping up stuff that people would otherwise choose not to use.

Nokia have spent time and money on stuff. Well, if they're so "shit hot", shouldn't they be able to make better equipment than everyone else? You know, innovating? Or is it not just more likely that people with patents get accustomed to "corporate welfare" and expect monetary praise for their past efforts in perpetuity?

Death throes

I've had almost every Nokia communicator. Unfortunately I gave my 9300 to my wife when I got my E90, and she won't give it back. The E90 is the last Nokia I will buy. I'd swear that my 9110 is a better phone (since I need two, I use both side by side).

I would've never got an iphone, but to be honest I've started using my ipod touch for email, web, calendar and apreciate that it does what it's supposed to. I could imagine me getting an iphone once I can get it on a network other that Movistar. I'm not keen on on-screen keyboards, but it's easier to use than the one on the E90.

Eyeing Apple's Patentes

Im wondering, now Nokia has brought out their large touch screen device, if they are eyeing up some of Apple's patents and want to blackmail Apple into a reciprocal licensing deal.

The fact they have waited 2-3 years to do this is a bit of a joke. If your precious patents are being infringed then you stand up and say so - its not like they wouldn't have noticed within months of the iPhone being released.

In addition the timing of Apple's record stock price and Nokia's record loss just make them look like a desperate company.

@AC 23/10/09 12:05 GMT

"(I have an iPhone btw, can't see the point of it, it sucks)" Did you not play with it in store first? If it's that bad, why the fuck did you buy one in the first place!?! Are you one of these individuals with more money than sence that you troll like to frequently tell us about? What a ridiculous thing to say! In short, Bullshit! It's OK not like the iPhone, lots of people don't! As for the rest of your rant; I doubt very much that Apple thought "let's save a whole bunch of time and money by stealing from those hardworking chaps at Nokia!". I imagine that Apple spend quite a significant amount on R & D as well, being a tech company, that's what they do! As for the "market share" crap that you spout; Yes Nokia are currently leading this sector with an approximate share of 40%, which is down YoY 16%. Remember that is across several products, not just one device. The iPhone on the other hand has a share of approximately 10%, a growth YoY of 111%. For ONE device that, as you point out, is just 3 years old. Comparatively, Nokia have probably 6 or 7 "smart"phones on the market, which works out at about 5% per device, which isn't too bad. I'd ague that 10% for a single device in a market that is not the core business of the manufacture is far more impressive! Ask yourself WHY Nokia are moving away from Symbian too. Like it or not, iPhone OS has been a game changer. You can quarrel about its deficiencies 'til you're blue in the face, it's irrelevant, the fact remains that all the smartphone manufacturers are reacting to it, and websites like this one benchmark every new smartphone against it.

On topic. I agree with Adam T. Patent licenses are like bills, you don't pay them until you have to! Perhaps there are sticking points in negotiations. It happens with Apple A LOT! Or are Nokia using patents that *they* should be paying for? Not out of the realms of possibility! Also are they angling for a cross patent deal? Losing a big share in the fastest growing portion of the mobile phone market and less that stellar financial reports, I'd be surprised if they weren't after something more!